N5648

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 5 OF 2011

KW TIMBER LIMITED
First Plaintiff

KLAUS WAI
Second Plaintiff

V

SOMMOH THUBTHIEN
First Defendant

SANTI FORESTRY (PNG) LIMITED
Second Defendant

Madang: Cannings J
2014: 14 March, 21 May, 27 June

DAMAGES – trespass to land – unlawful entry of land subject to timber authority and felling of timber – assessment of damages after entry of default judgment

The first plaintiff was an authorised timber industry participant and was granted a timber authority over a particular timber area. The second defendant was an authorised timber industry participant and held a timber authority over an adjacent timber area. The second defendant without lawful authority entered the first plaintiff's timber area and felled timber on it. The first plaintiff and its managing director (the second plaintiff) commenced proceedings against the second defendant and its general manager (the first defendant) claiming damages for trespass to land. Liability was established by entry of default judgment. There was a trial on assessment of damages. The plaintiffs sought general damages for breaches of the Forestry Act of K50,000.00, business losses of K11,534,042.23 and general damages for pain and suffering of K20,000.00, a total claim of K11,604,042.23, plus interest and costs.

Held:

(1)	The plaintiffs failed to adduce sufficient evidence to support most of the claims.

(2)	The court awarded zero general damages for breaches of the Forestry Act, K30,000.00 for business losses and K1,000.00 general damages for pain and suffering, a total of K31,000.00 plus interest of K8,556.00, being a total judgment sum of K39,556.00.

(3)	The parties were ordered to bear their own costs as the bulk of the plaintiffs' claim was misconceived and unsupported by the evidence.

Cases cited

The following cases are cited in the judgment:

Albert Baine v The State (1995) N1335
Bob v Stettin Bay Lumber Company Ltd (2008) N3440
Buna v The State (2004) N2696
Graham Mappa v ELCOM (1992) N1093
Ibi Enei v Rimbunan Hijau Ltd (2011) N4402
Jonathan Mangope Paraia v The State (1995) N1343
Kopung Brothers Business Group v Sakawar Kasieng [1997] PNGLR 331
Kuberi Epi v Turama Forest Industries Ltd (1998) N1761
Leeway East Enterprise Ltd v Daniel Danaben (2013) N4951
Rafflin v Richard Gault Industries Pty Ltd [1998] PNGLR 394
William Mel v Coleman Pakalia (2005) SC790
Yooken Paklin v The State (2001) N2212

TRIAL

This was a trial on assessment of damages for trespass to land.

Counsel

D F Wa'au, for the plaintiffs
B B Wak, for the defendants

27th June, 2014

1. CANNINGS J: This is an assessment of damages for the tort of trespass to land, following entry of default judgment.

2. The first plaintiff, KW Timber Ltd, is an authorised timber industry participant. In March 2009 the PNG Forest Authority granted it a timber authority over an area of customary land called the Mungim timber area in the Transgogol area of Madang Province. The second defendant, Santi Forestry (PNG) Ltd is also an authorised timber industry participant. During 2009 it held a timber authority over the Baisarik timber area, which is adjacent to the Mungim timber area. In September 2009 the second defendant without lawful authority entered the Mungim timber area and felled timber on it.

3. The first plaintiff and its managing director (the second plaintiff, Klaus Wai) commenced proceedings against the second defendant and its general manager (the first defendant, Sommoh Thubthien) claiming damages for trespass to land. Liability was established by entry of default judgment on 22 August 2011.

4. The effect of the default judgment is that the facts and cause of action pleaded in the statement of claim are presumed to have been proven, and are only revisited if they do not make sense or would make an assessment of damages a futile exercise (William Mel v Coleman Pakalia (2005) SC790). Here, the facts pleaded were clear, as was the cause of action relied on, so the issue of liability has not been reconsidered. The plaintiffs seek three categories of damages:

1	general damages for breaches of the Forestry Act, K50,000.00;
2	business losses, K11,534,042.23;
3	general damages for pain and suffering, K20,000.00;

a total claim of K11,604,042.23, plus interest and costs.

1	GENERAL DAMAGES FOR BREACHES OF THE FORESTRY ACT

5. Mr Wa'au submitted that the plaintiffs should be awarded K50,000.00 as the trespass committed by the defendants had resulted in the plaintiffs losing all timber to be harvested, which had been taken over and harvested by the defendants. He urged me to follow my decisions in Buna v The State (2004) N2696 and Bob v Stettin Bay Lumber Company Ltd (2008) N3440, trespass cases in which I awarded general damages of K33,800.00 and K20,000.00 respectively for environmental damage to the plaintiff's land.

6. I see two major problems with this claim, and indeed the whole of the plaintiff's case. First, it must be borne in mind that the land in the present case is not the plaintiffs' land. It is customary land, which the first plaintiff was entitled to enter, and from which it was authorised to harvest timber. Therefore it is not entitled to general damages for environmental damage to the land.

7. Secondly, the extent of damage that has been incurred by the plaintiffs is unquantified. A brazen submission that 'the plaintiffs lost all timber to be harvested' is not only very vague but it is not supported by the evidence. The evidence suggests that the second defendant realised the mistake that had been made (entering on the land covered by the first plaintiff's timber authority) fairly soon after it had felled a small number of trees. The Forest Authority was informed and in November 2009 a meeting was convened, involving the plaintiffs and the defendants and the Provincial Forest Officer, Ms Kolokol, and an attempt was made to sort out the problem. The defendants were willing to concede the mistake and compensate the plaintiffs. The defendants did not, in fact, harvest any of the timber that they had unlawfully felled. It was the plaintiffs who were not interested in negotiating a solution to the problem, preferring instead to institute court proceedings.

8. In these circumstances I see no basis for an award of general damages. Nothing is awarded.

2	BUSINESS LOSSES

9. Mr Wa'au submitted that the plaintiff should be awarded K11,534,042.23 damages for business losses, calculated over a five-year period on the strength of export income that was foregone due to the inability of the plaintiffs to meet supply arrangements with a New Caledonian company called Western Island Timbers.

10. This claim is fundamentally flawed due to the problem highlighted earlier: there is a lack of evidence to show that the tort committed by the defendants prevented the plaintiffs from harvesting all timber on the land covered by the timber authority. This whole case is based on wild and unsupported claims which, frankly, have entered the realm of fantasy. This case is quite unlike other cases in which large awards of damages have been made against timber operators which have trespassed upon customary land and unlawfully harvested timber: for example, Rafflin v Richard Gault Industries Pty Ltd [1998] PNGLR 394, Kuberi Epi v Turama Forest Industries Ltd (1998) N1761 and Ibi Enei v Rimbunan Hijau Ltd (2011) N4402. In those cases the plaintiffs not only established a cause of action in trespass; they presented strong evidence of the considerable extent of the damage done by the trespassers. That sort of evidence is missing here.

11. The plaintiffs have engaged a registered public accountant, Mr Jack K Abegul, who has given what is dressed up to be expert evidence to support the calculation of the amount of alleged lost business income. With respect I find Mr Abegul's evidence worthless as it is not based on any hard evidence of how much lost opportunity to harvest timber the plaintiffs endured.

12. At this juncture, in view of the deficiencies in the evidence, it is appropriate to call upon some pertinent principles for assessment of damages:

•	The plaintiff has the onus of proving its loss on the balance of probabilities. It is not sufficient to make assertions in a statement of claim and simply expect the court to award what is claimed. The burden of proving a fact is upon the party alleging it, not the party who denies it (Yooken Paklin v The State (2001) N2212).

•	Corroboration of a claim is usually required and the corroboration must come from an independent source (Albert Baine v The State (1995) N1335, Kopung Brothers Business Group v Sakawar Kasieng [1997] PNGLR 331).

•	The fact that damages cannot be assessed with certainty does not necessarily relieve the wrongdoer of the necessity of paying damages. Where precise evidence is available the court expects to have it. However, where it is not, the Court must do the best it can (Graham Mappa v ELCOM (1992) N1093, Jonathan Mangope Paraia v The State (1995) N1343).

13. The claim for business losses in this case is extravagant. There is no corroboration of the claim. So what should the court do? Award nothing? I think this is a case where such an approach could well be justified. On the other hand I must take into account that the plaintiff has established a cause of action in trespass and has obviously lost some opportunity to earn income. Mr Wak for the defendants has submitted that nominal damages for business losses could be fixed at K10,000.00 per month, for a period of three months. I uphold that submission and award the sum of K30,000.00.

3	GENERAL DAMAGES FOR PAIN AND SUFFERING

14. This is another spurious claim, lacking in evidence. I can see that the plaintiffs would have been distressed and shocked to find that the defendants had encroached on the land on which they held a lawful timber authority. But the impression I have gained after examining the evidence is that much of the plaintiffs' pain and suffering and inconvenience has been self-induced. It is as if they have been determined to incur as much pain and suffering as possible, in order to maximise the claim for damages. They are entitled to a nominal amount only: K1,000.00 is awarded.

SUMMARY OF DAMAGES ASSESSED

1	General damages for breaches of the Forestry Act: 0
2	Business losses: K30,000.00;
3	General damages for pain and suffering: K1,000.00

being a total amount of K31,000.00.

INTEREST

15. Interest will be awarded at the rate of 8 per cent per annum on the total amount of damages under Section 1(1) of the Judicial Proceedings (Interest on Debts and Damages) Act Chapter No 52. Interest is calculated from the date of service of the writ, 14 January 2011, to the date of this judgment, a period of 3.45 years, by applying the formula D x I x N = A, where:

•	D is the amount of damages assessed;
•	I is the rate of interest per annum;
•	N is the appropriate period in numbers of years;
•	A is the amount of interest.

Thus K31,000.00 x 0.08 x 3.45 = K8,556.00.

COSTS

16. The general rule is that costs follow the event, ie the successful party has its costs paid for by the losing party on a party-to-party basis. In this case there is no clear winner. The plaintiffs have on the one hand succeeded in obtaining an award of damages but on the other hand have succeeded in convincing the court that only 0.27% (K31,000.00 out of K11,604,042.23) of its claim had merit; 99.73% of the claim was without merit. The defendants have succeeded in showing that the vast bulk of the claim had no evidentiary basis and was misconceived. In these circumstances the approach taken in Leeway East Enterprise Ltd v Daniel Danaben (2013) N4951 is the most appropriate: the parties will bear their own costs.

ORDER

17. The Court orders that:

(1)	the defendants pay to the plaintiffs damages of K31,000.00 plus interest of K8,556.00, being a total judgment sum of K39,556.00; and

(2)	the parties shall bear their own costs.

Judgment accordingly.
_________________________________________________________
Meten Lawyers: Lawyers for the Plaintiffs	
Kunai & Co Lawyers: Lawyers for the Defendants